-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Md37s0iadseNwS0nFBFMIxusZhLIuHmmG3q6IsgUttjccD02YcV0iFOqRO1Fxdwv 9totVn5wVYJ2fWoJY90Jtg== 0000936772-04-000210.txt : 20041012 0000936772-04-000210.hdr.sgml : 20041012 20041012164837 ACCESSION NUMBER: 0000936772-04-000210 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20040731 FILED AS OF DATE: 20041012 DATE AS OF CHANGE: 20041012 EFFECTIVENESS DATE: 20041012 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIANCEBERNSTEIN GREATER CHINA 97 FUND INC CENTRAL INDEX KEY: 0001038457 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-08201 FILM NUMBER: 041075191 BUSINESS ADDRESS: STREET 1: C/O ALLIANCE CAPITAL MANAGEMENT L P STREET 2: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 2129692124 MAIL ADDRESS: STREET 1: C/O ALLIANCE CAPITAL MANAGEMENT L P STREET 2: 1324 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 FORMER COMPANY: FORMER CONFORMED NAME: ALLIANCE GREATER CHINA 97 FUND INC DATE OF NAME CHANGE: 19970506 N-CSR 1 edg10286_ar.txt United States Securities and Exchange Commission Washington, D.C. 20549 Form N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-08201 ALLIANCEBERNSTEIN GREATER CHINA `97 FUND, INC. (Exact name of registrant as specified in charter) 1345 Avenue of the Americas, New York, New York 10105 (Address of principal executive offices) (Zip code) Mark R. Manley Alliance Capital Management L.P. 1345 Avenue of the Americas New York, New York 10105 (Name and address of agent for service) Registrant's telephone number, including area code: (800) 221-5672 Date of fiscal year end: July 31, 2004 Date of reporting period: July 31, 2004 ITEM 1. REPORTS TO STOCKHOLDERS. - ------------------------------------------------------------------------------- International Regional - ------------------------------------------------------------------------------- [LOGO] AllianceBernstein (SM) Investment Research and Management AllianceBernstein Greater China '97 Fund Annual Report -- July 31, 2004 Investment Products Offered - --------------------------- o Are Not FDIC Insured o May Lose Value o Are Not Bank Guaranteed - --------------------------- The investment return and principal value of an investment in the Fund will fluctuate as the prices of the individual securities in which it invests fluctuate, so that your shares, when redeemed, may be worth more or less than their original cost. You should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. For a free copy of the Fund's prospectus, which contains this and other information, visit our web site at www.alliancebernstein.com or call your financial advisor or Alliance at (800) 227-4618. Please read the prospectus carefully before you invest. You may obtain performance information current to the most recent month-end by visiting www.alliancebernstein.com (click on Investors/ Products & Services/ Mutual Funds). This shareholder report must be preceded or accompanied by the Fund's prospectus for individuals who are not current shareholders of the Fund. You may obtain a description of the Fund's proxy voting policies and procedures, and information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge. Simply visit Alliance Capital's web site at www.alliancebernstein.com (click on Investors, then the "Proxy voting policies" link or "Proxy voting records" link on the left side of the page), or go to the Securities and Exchange Commission's, (The "Commission") web site at www.sec.gov, or call Alliance Capital at (800) 227-4618. The Fund files its complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Alliance publishes full portfolio holdings for the Fund monthly at www.alliancebernstein.com. AllianceBernstein Investment Research and Management, Inc., is an affiliate of Alliance Capital Management L.P., the manager of the funds, and is a member of the NASD. September 20, 2004 Annual Report This report provides management's discussion of fund performance for AllianceBernstein Greater China '97 Fund (the "Fund") for the annual reporting period ended July 31, 2004. Investment Objectives and Policies This open-end fund is a non-diversified management investment company that seeks long-term capital appreciation by investing at least 80% of its total assets in equity securities issued by Greater China companies ("Greater China" refers to the People's Republic of China ("China"), the Hong Kong Special Administrative Region ("Hong Kong") and the Republic of China ("Taiwan")). Investment Results The table on page 3 shows the Fund's performance compared to its benchmark, the MSCI Golden Dragon Index, and the Lipper China Region Funds Average (the "Lipper Average"), for the six- and 12-month periods ended July 31, 2004. The MSCI Golden Dragon Index is a composite index consisting of equity securities of companies based in China, Hong Kong and Taiwan. These are the countries in which the great majority of the Fund's securities are located. Funds in the Lipper Average have generally similar investment objectives to the Fund, although some may have different investment policies and sales and management fees. During the 12-month period ended July 31, 2004, the Fund outperformed the MSCI Golden Dragon Index due mainly to our overweighting in the cyclicals, capital goods and energy sectors that benefited from the fixed investment boom in China. Our overweighting in the consumer sector also contributed positively with the pick-up in consumer spending following the SARS impact. The Fund underperformed the MSCI Golden Dragon Index during the six-month reporting period due mainly to the sharp sell-off of China-related stocks in the second quarter of 2004. This occurred when investors turned negative on China as macro control issues were introduced to cool down the economy. Market Review and Investment Strategy During the reporting period, the Greater China stock markets went through a sharp rebound in the first six-month period following the SARS impact and the Gulf War. In the last six-month period, the Greater China stock markets were affected by a number of factors, including: concern of overheating in China, the trend of U.S. interest rates, rising oil prices and a weak technology sector outlook. We overweighted the cyclicals, capital goods, energy and consumer sectors in the first six-month period in order to benefit from the fixed asset investment boom and consumption recovery. We trimmed our exposure to the cyclicals and capital goods sectors in the last six-month period due to the macro control measures introduced in China. _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 1 Historical Performance - ------------------------------------------------------------------------------- HISTORICAL PERFORMANCE An Important Note About the Value of Historical Performance The performance shown on the following pages represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting www.alliancebernstein.com (click on Investors/Products & Services/Mutual Funds). The investment return and principal value of an investment in the Fund will fluctuate, so that your shares, when redeemed, may be worth more or less than their original cost. You should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. For a free copy of the Fund's prospectus, which contains this and other information, visit our web site at www.alliancebernstein.com or call your financial advisor or Alliance at (800) 227-4618. You should read the prospectus carefully before you invest. Returns are annualized for periods longer than one year. All fees and expenses related to the operation of the Fund have been deducted. NAV returns do not reflect sales charges; if sales charges were reflected, the Fund's quoted performance would be lower. SEC returns reflect the applicable sales charges for each share class: a 4.25% maximum front-end sales charge for Class A shares; the applicable contingent deferred sales charge for Class B shares (4% year 1, 3% year 2, 2% year 3, 1% year 4); a 1% 1 year contingent deferred sales charge for Class C shares. Returns for Advisor Class shares will vary due to different expenses associated with this class. Performance assumes reinvestment of distributions and does not account for taxes. During the reporting period, the Advisor waived a portion of its advisory fee or reimbursed the Fund for a portion of its expenses to the extent necessary to limit the Fund's expenses on an annual basis to 2.50%, 3.20%, 3.20% and 2.20% of the average daily net assets of Class A, Class B, Class C and Advisor Class shares, respectively. This waiver extends through the Fund's current fiscal year and may be extended by the Advisor for additional one-year terms. Without the waiver, the Fund's expenses would have been higher and its performance would have been lower than that shown above. Benchmark Disclosure The unmanaged Morgan Stanley Capital International (MSCI) Golden Dragon Index is an aggregate of the MSCI Hong Kong Index, the MSCI China Index and the MSCI Taiwan at 65% Index (the MSCI Taiwan Index has an inclusion weight at 65% of its market capitalization in the MSCI Index series). The Lipper China Region Funds Average (the Lipper Average) represents funds that invest in equity securities whose primary trading markets or operations are concentrated in the China region or in a single country within this region. For the six- and 12-month periods ended July 31, 2004, the Lipper Average consisted of 22 funds for both periods. These funds have generally similar investment objectives to the Fund, although some may have different investment policies and sales and management fees. Investors cannot invest directly in an index or average, and its results are not indicative of any specific investment, including the Fund. A Word About Risk Since the Fund invests in foreign currency denominated securities, fluctuations may be magnified by changes in foreign exchange rates. The Fund will invest substantially all of its assets in Greater China companies and is subject to greater risk than would a fund with a more diversified portfolio. Investments in Greater China companies entail risks different from, and in certain cases, greater than, risks associated with investments in the U.S. or in other international markets. While the Fund invests principally in common stocks and other equity securities, in order to achieve its investment objectives, the Fund may at times use certain types of investment derivatives, such as options, futures, forwards and swaps. These instruments involve risks different from, and in certain cases, greater than the risks presented by more traditional investments. These risks are more fully discussed in the prospectus. (Historical Performance continued on next page) _______________________________________________________________________________ 2 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Historical Performance - ------------------------------------------------------------------------------- HISTORICAL PERFORMANCE (continued from previous page) Returns THE FUND VS. ITS BENCHMARKS ------------------------- PERIODS ENDED JULY 31, 2004 6 Months 12 Months - ------------------------------------------------------------------------------- AllianceBernstein Greater China '97 Fund Class A -13.31% 22.30% - ------------------------------------------------------------------------------- Class B -13.56% 21.41% - ------------------------------------------------------------------------------- Class C -13.59% 21.34% - ------------------------------------------------------------------------------- Advisor Class -13.12% 22.72% - ------------------------------------------------------------------------------- MSCI Golden Dragon Index -10.89% 18.43% - ------------------------------------------------------------------------------- Lipper China Region Funds Average -9.84% 20.40% - ------------------------------------------------------------------------------- GROWTH OF A $10,000 INVESTMENT IN THE FUND 9/3/97* TO 7/31/04 AllianceBernstein Greater China '97 Fund Class A: $10,550 MSCI Golden Dragon Index: $7,171 [THE FOLLOWING TABLE WAS DEPICTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL.] AllianceBernstein Greater China '97 MSCI Golden Fund Class A Dragon Index - ------------------------------------------------------------------------------- 9/03/97* $ 9,575 $ 10,000 7/31/98 $ 4,673 $ 5,163 7/31/99 $ 7,916 $ 8,187 7/31/00 $ 9,982 $ 9,396 7/31/01 $ 8,158 $ 6,089 7/31/02 $ 7,289 $ 5,710 7/31/03 $ 8,626 $ 6,055 7/31/04 $ 10,550 $ 7,171 This chart illustrates the total value of an assumed $10,000 investment in AllianceBernstein Greater China '97 Fund Class A shares (from 9/3/97* to 7/31/04) as compared to the performance of the Fund's benchmark and the Lipper Average. * Since inception of the Fund's Class A shares on 9/3/97. See Historical Performance and Benchmark disclosures on previous page. (Historical Performance continued on next page) _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 3 Historical Performance - ------------------------------------------------------------------------------- HISTORICAL PERFORMANCE (continued from previous page) AVERAGE ANNUAL RETURNS AS OF JULY 31, 2004 - -------------------------------------------------------------- NAV Returns SEC Returns Class A Shares 1 Year 22.30% 17.12% 5 Years 5.91% 5.00% Since Inception* 1.41% 0.78% Class B Shares 1 Year 21.41% 17.41% 5 Years 5.07% 5.07% Since Inception* 0.65% 0.65% Class C Shares 1 Year 21.34% 20.34% 5 Years 5.04% 5.04% Since Inception* 0.61% 0.61% Advisor Class Shares 1 Year 22.72% 5 Years 6.22% Since Inception* 1.71% SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES) AS OF THE MOST RECENT CALENDAR QUARTER-END (JUNE 30, 2004) - -------------------------------------------------------------- Class A Shares 1 Year 33.18% 5 Years 4.26% Since Inception* 1.12% Class B Shares 1 Year 33.87% 5 Years 4.33% Since Inception* 0.98% Class C Shares 1 Year 36.84% 5 Years 4.29% Since Inception* 0.94% * Class A, B, C and Advisor Class share inception date: 9/3/97. See Historical Performance disclosures on page 2. _______________________________________________________________________________ 4 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Fund Expenses - ------------------------------------------------------------------------------- FUND EXPENSES As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below. Actual Expenses The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. Hypothetical Example for Comparison Purposes The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed annual rate of return of 5% before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or contingent deferred sales charges on redemptions. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. Beginning Ending Account Value Account Value Expenses Paid February 1, 2004 July 31, 2004 During Period* - ------------------------------------------------------------------------------- CLASS A Actual $1,000 $ 866.93 $10.77 Hypothetical (5% return before expenses) $1,000 $1,013.33 $11.61 - ------------------------------------------------------------------------------- CLASS B Actual $1,000 $ 864.44 $14.65 Hypothetical (5% return before expenses) $1,000 $1,009.15 $15.79 - ------------------------------------------------------------------------------- CLASS C Actual $1,000 $ 864.10 $14.46 Hypothetical (5% return before expenses) $1,000 $1,009.35 $15.59 - ------------------------------------------------------------------------------- ADVISOR CLASS Actual $1,000 $ 868.84 $ 9.80 Hypothetical (5% return before expenses) $1,000 $1,014.37 $10.57 - ------------------------------------------------------------------------------- * Expenses are equal to the classes' annualized expense ratios of 2.32%, 3.16%, 3.12% and 2.11% respectively, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year/366 (to reflect the one-half year period). _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 5 Portfolio Summary - ------------------------------------------------------------------------------- PORTFOLIO SUMMARY July 31, 2004 PORTFOLIO STATISTICS Net Assets ($mil): $42.9 SECTOR BREAKDOWN* 18.5% Finance 14.3% Multi-Industry 12.9% Technology 10.3% Basic Industry 8.6% Energy 8.3% Consumer Staples 6.1% Consumer Manufacturing [PIE CHART OMITTED] 5.2% Capital Goods 4.7% Consumer Services 4.6% Healthcare 4.3% Transportation 2.2% Utilities COUNTRY BREAKDOWN* 74.0% Hong Kong 18.0% Taiwan 7.0% Singapore [PIE CHART OMITTED] 1.0% Canada * All data is as of July 31, 2004. The Fund's sector and country breakdowns are expressed as a percentage of total investments and may vary over time. _______________________________________________________________________________ 6 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Ten Largest Holdings - ------------------------------------------------------------------------------- TEN LARGEST HOLDINGS July 31, 2004 Percent of Company U.S. $ Value Net Assets _______________________________________________________________________________ PetroChina Co., Ltd. Cl. H $ 1,490,442 3.5% - ------------------------------------------------------------------------------- CNOOC, Ltd. 1,442,363 3.3 - ------------------------------------------------------------------------------- Huaneng Power International, Inc. Cl. H 1,430,824 3.3 - ------------------------------------------------------------------------------- Lifestyle International Holdings, Ltd. 1,295,800 3.0 - ------------------------------------------------------------------------------- Yanzhou Coal Mining Co., Ltd. Cl. H 1,211,585 2.8 - ------------------------------------------------------------------------------- Skyworth Digital Holdings, Ltd. 1,115,428 2.6 - ------------------------------------------------------------------------------- Lianhua Supermarket Holdings, Ltd. Cl. H 1,025,680 2.4 - ------------------------------------------------------------------------------- GP Batteries International, Ltd. 970,987 2.3 - ------------------------------------------------------------------------------- Cheung Kong (Holdings), Ltd. 884,649 2.1 - ------------------------------------------------------------------------------- China Life Insurance Co., Ltd. Cl. H 826,955 1.9 - ------------------------------------------------------------------------------- $ 11,694,713 27.2% _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 7 Portfolio of Investments - ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS July 31, 2004 Company Shares U.S. $ Value - ------------------------------------------------------------------------------- COMMON STOCKS-99.3% Canada-1.0% Sino Forest Corp. Cl. A(a) 200,000 $ 421,274 ------------- Hong Kong-73.4% AV Concept Holdings, Ltd. 2,500,000 371,809 Chen Hsong Holdings, Ltd. 300,000 165,391 Cheung Kong (Holdings), Ltd. 120,000 884,649 China Life Insurance Co., Ltd. Cl. H(a) 1,500,000 826,955 China Mengniu Dairy Co., Ltd.(a) 742,000 468,524 China Merchants Holdings International Co., Ltd. 500,000 701,950 China Oilfield Services, Ltd. Cl. H 2,500,000 745,221 China Resources Enterprise, Ltd. 458,000 563,714 China Resources Power Holdings Co., Ltd.(a) 1,200,000 619,255 China Shipping Development Co., Ltd. Cl. H 1,200,000 784,646 China Telecom Corp., Ltd. Cl. H 774,000 255,529 CNOOC, Ltd. 3,000,000 1,442,363 COFCO International, Ltd. 750,000 310,108 Esprit Holdings, Ltd. 100,000 446,171 Fountain Set (Holdings), Ltd. 750,000 514,443 Giordano International, Ltd. 500,000 302,896 Global Bio-chem Technology Group Co., Ltd. 700,000 547,457 Harbin Power Equipment Co., Ltd. Cl. H 1,000,000 247,445 Hong Kong Exchanges & Clearing, Ltd. 200,000 412,836 Hongkong Land Holdings, Ltd. 240,000 436,800 Hopewell Holdings, Ltd. 220,000 434,376 HSBC Holdings Plc. 23,200 342,064 Huaneng Power International, Inc. Cl. H 1,800,000 1,430,824 Industrial and Commercial Bank of China (Asia), Ltd. 400,000 538,482 Kingboard Chemical Holdings, Ltd. 300,000 555,791 Kingdee International Software Group Co., Ltd. 400,000 121,800 Li & Fung, Ltd. 300,000 415,401 Lianhua Supermarket Holdings, Ltd. Cl. H 1,000,000 1,025,680 Lifestyle International Holdings, Ltd.(a) 949,000 1,295,800 Midland Realty (Holdings), Ltd. 1,600,000 410,272 Nam Tai Electronic & Electrical Products, Ltd.(a) 877,000 314,833 Norstar Founders Group, Ltd.(a) 1,500,000 399,054 NWS Holdings, Ltd. 500,000 570,535 Oriental Press Group, Ltd. 1,200,000 457,710 Pacific Century Insurance Holdings, Ltd. 1,000,000 410,272 PetroChina Co., Ltd. Cl. H 3,000,000 1,490,442 Ping An Insurance (Group) Co. of China, Ltd. Cl. H(a) 277,500 355,783 Ports Design, Ltd. 200,000 376,296 Raymond Industrial, Ltd. 150,000 49,040 Shandong Weigao Group Medical Polymer Co., Ltd. Cl. H(a) 6,980,000 572,740 _______________________________________________________________________________ 8 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Portfolio of Investments - ------------------------------------------------------------------------------- Company Shares U.S. $ Value - ------------------------------------------------------------------------------- Shun Tak Holdings, Ltd. 442,000 $ 221,008 Sinopec Shanghai Petrochemical Co., Ltd. Cl. H 1,300,000 462,518 Sinotrans, Ltd. Cl. H 500,000 169,878 Skyworth Digital Holdings, Ltd. 4,000,000 1,115,428 Solomon Systech International, Ltd.(a) 2,000,000 453,864 Standard Chartered Plc. 20,000 326,936 Swire Pacific, Ltd. Cl. A 20,500 136,672 Tai Cheung Holdings, Ltd. 600,000 200,008 Tong Ren Tang Technologies Co., Ltd. Cl. H 300,000 692,334 TPV Technology, Ltd. 500,000 333,346 Tsingtao Brewery Co., Ltd. Cl. H 900,000 784,646 Vital Biotech Holdings, Ltd. 3,000,000 165,391 Weiqiao Textile Co., Ltd. Cl. H 360,000 533,097 Wing Hang Bank, Ltd. 52,500 315,685 Wing Lung Bank, Ltd. 40,000 287,191 Wumart Stores, Inc. Cl. H(a) 500,000 817,339 Yantai North Andre Juice Co., Ltd. Cl. H 3,900,000 410,016 Yanzhou Coal Mining Co., Ltd. Cl. H 1,000,000 1,211,585 Zhejiang Expressway Co., Ltd. Cl. H 400,000 294,883 ------------- 31,547,182 ------------- Singapore-7.0% Autron Corp., Ltd. 2,500,000 399,733 Elec & Eltek International Co., Ltd. 200,000 554,000 GP Batteries International, Ltd. 500,000 970,987 Osim International, Ltd. 960,000 569,335 Want Want Holdings, Ltd. 500,000 515,000 ------------- 3,009,055 ------------- Taiwan-17.9% Asustek Computer, Inc. 200,000 441,306 Cathay Financial Holding Co., Ltd. 300,000 494,263 Cathay Financial Holding Co., Ltd. (GDR)(a)(b) 4,200 69,510 Cheng Loong Co. 1,483,200 473,455 Chinatrust Financial Holding Co., Ltd. 500,000 510,444 Chunghwa Telecom Co., Ltd. (ADR) 4,100 65,928 Compal Electronics, Inc.(a) 100,000 99,735 Flexium Interconnect, Inc. 336,000 263,936 Hon Hai Precision Industry Co., Ltd. 205,360 740,118 Jenn Feng Industrial Co., Ltd.(a) 240,000 441,306 MediaTek, Inc. 76,231 439,579 Mega Financial Holding Co., Ltd. 1,000,000 623,713 Nan Ya Plastics Corp. 424,947 567,596 Taiwan Semiconductor Manufacturing Co., Ltd. 455,107 574,407 Tong-Tai Machine & Tool Co., Ltd. 300,000 426,302 United Microelectronics Corp.(a) 1,031,196 658,339 Wan Hai Lines, Ltd. 449,240 376,680 Yageo Corp.(a) 1,000,000 413,357 ------------- 7,679,974 ------------- _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 9 Portfolio of Investments - ------------------------------------------------------------------------------- U.S. $ Value - ------------------------------------------------------------------------------- Total Investments-99.3% (cost $40,341,921) $ 42,657,485 Other assets less liabilities-0.7% 290,292 ------------- Net Assets-100% $ 42,947,777 ============= (a) Non-income producing security. (b) Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security is considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At July 31, 2004, this security amounted to $69,510 or 0.2% of net assets. Glossary of terms: ADR - American Depositary Receipt GDR - Global Depositary Receipt See notes to financial statements. _______________________________________________________________________________ 10 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Statement of Assets & Liabilities - ------------------------------------------------------------------------------- STATEMENT OF ASSETS & LIABILITIES July 31, 2004 ASSETS Investments in securities, at value (cost $40,341,921) $ 42,657,485 Cash 44,104 Foreign cash, at value (cost $394,039) 393,351 Dividends receivable 112,747 Receivable for capital stock sold 54,093 ------------- Total assets 43,261,780 ------------- LIABILITIES Payable for capital stock redeemed 127,927 Advisory fee payable 29,050 Distribution fee payable 25,277 Transfer Agent fee payable 6,882 Accrued expenses 124,867 ------------- Total liabilities 314,003 ------------- Net Assets $ 42,947,777 ============= COMPOSITION OF NET ASSETS Capital stock, at par $ 4,086 Additional paid-in capital 40,837,586 Accumulated net realized loss on investment and foreign currency transactions (208,048) Net unrealized appreciation of investments and foreign currency denominated assets and liabilities 2,314,153 ------------- $ 42,947,777 ============= CALCULATION OF MAXIMUM OFFERING PRICE Class A Shares Net asset value and redemption price per share ($17,718,810/1,647,980 shares of capital stock issued and outstanding) $10.75 Sales charge--4.25% of public offering price 0.48 ------ Maximum offering price $11.23 ====== Class B Shares Net asset value and offering price per share ($12,871,980/1,245,908 shares of capital stock issued and outstanding) $10.33 ====== Class C Shares Net asset value and offering price per share ($10,977,716/1,065,725 shares of capital stock issued and outstanding) $10.30 ====== Advisor Class Shares Net asset value, redemption and offering price per share ($1,379,271/126,217 shares of capital stock issued and outstanding) $10.93 ====== See notes to financial statements. _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 11 Statement of Operations - ------------------------------------------------------------------------------- STATEMENT OF OPERATIONS Year Ended July 31, 2004 INVESTMENT INCOME Dividends (net of foreign taxes withheld of $33,558) $ 878,162 Interest 9,877 $ 888,039 ------------ EXPENSES Advisory fee 433,758 Distribution fee--Class A 58,710 Distribution fee--Class B 118,697 Distribution fee--Class C 106,393 Custodian 263,465 Transfer agency 126,733 Audit and legal 112,233 Administrative 109,500 Registration 66,599 Printing 48,186 Directors' fees 12,300 Miscellaneous 3,620 ------------ Total expenses 1,460,194 Less: expenses waived and reimbursed by the Adviser and the Transfer Agent (see Note B) (253,763) Less: expense offset arrangement (see Note B) (9) ------------ Net expenses 1,206,422 ------------ Net investment loss (318,383) ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS Net realized gain on: Investment transactions 2,071,748 Foreign currency transactions 53,896 Net change in unrealized appreciation/depreciation of: Investments (456,379) Foreign currency denominated assets and liabilities (1,665) ------------ Net gain on investment and foreign currency transactions 1,667,600 ------------ NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,349,217 ============ See notes to financial statements. _______________________________________________________________________________ 12 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Statement of Changes in Net Assets - ------------------------------------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS Year Ended Year Ended July 31, July 31, 2004 2003 ============= ============= INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income (loss) $ (318,383) $ 9,233 Net realized gain (loss) on investment and foreign currency transactions 2,125,644 (843,447) Net change in unrealized appreciation/depreciation of investments and foreign currency denominated assets and liabilities (458,044) 2,848,106 ------------- ------------- Net increase in net assets from operations 1,349,217 2,013,892 DIVIDENDS TO SHAREHOLDERS FROM Net investment income Class A (56,673) (23,187) Class B (14,331) (14,269) Class C (13,116) (5,705) Advisor Class (5,465) (2,310) CAPITAL STOCK TRANSACTIONS Net increase 27,933,553 4,769,657 ------------- ------------- Total increase 29,193,185 6,738,078 NET ASSETS Beginning of period 13,754,592 7,016,514 ------------- ------------- End of period (including undistributed net investment income of $0 and $16,773, respectively) $ 42,947,777 $ 13,754,592 ============= ============= See notes to financial statements. _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 13 Notes to Financial Statements - ------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS July 31, 2004 NOTE A Significant Accounting Policies AllianceBernstein Greater China '97 Fund, Inc. (the "Fund") was organized as a Maryland corporation on April 30, 1997 and is registered under the Investment Company Act of 1940 as a non-diversified, open-end management investment company. The Fund offers Class A, Class B, Class C and Advisor Class shares. Class A shares are sold with an initial sales charge of up to 4.25% for purchases not exceeding $1,000,000. With respect to purchases of $1,000,000 or more, Class A shares redeemed within one year of purchase may be subject to a contingent deferred sales charge of 1%. Class B shares are sold with a contingent deferred sales charge which declines from 4% to zero depending on the period of time the shares are held. Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase. Class C shares are subject to a contingent deferred sales charge of 1% on redemptions made within the first year after purchase. Advisor Class shares are sold without an initial or contingent deferred sales charge and are not subject to ongoing distribution expenses. Advisor Class shares are offered to investors participating in fee-based programs and to certain retirement plan accounts. All four classes of shares have identical voting, dividend, liquidation and other rights, except that each class bears different distribution expenses and has exclusive voting rights with respect to its distribution plan. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Additional information about some of the items discussed in these Notes to Financial Statements is contained in the Fund's Statement of Additional Information, which is available upon request. The following is a summary of significant accounting policies followed by the Fund. 1. Security Valuation In accordance with Pricing Policies adopted by the Board of Directors of the Fund (the "Pricing Policies") and applicable law, portfolio securities are valued at current market value or at fair value. The Board of Directors has delegated to Alliance Capital Management L.P. (the "Adviser"), subject to the Board's continuing oversight, certain responsibilities with respect to the implementation of the Pricing Policies. Pursuant to the Pricing Policies, securities for which market quotations are readily available are valued at their current market value. In general, the market value of these securities is determined as follows: Securities listed on a national securities exchange or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day. If no bid or asked prices are quoted on such day, then the security is valued in good faith at fair value in accordance with the Pricing Policies. Securities listed on more than _______________________________________________________________________________ 14 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Notes to Financial Statements - ------------------------------------------------------------------------------- one exchange are valued by reference to the principal exchange on which the securities are traded; securities not listed on an exchange but traded on The Nasdaq Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ Official Closing Price; listed put or call options are valued at the last sale price. If there has been no sale on that day, such securities will be valued at the closing bid prices on that day; open futures contracts and options thereon are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuations, the last available closing settlement price is used; securities traded in the over-the-counter market, (but excluding securities traded on NASDAQ) are valued at the mean of the current bid and asked prices as reported by the National Quotation Bureau or other comparable sources; U.S. Government securities and other debt instruments having 60 days or less remaining until maturity are valued at amortized cost if their original maturity was 60 days or less, or by amortizing their fair value as of the 61st day prior to maturity if their original term to maturity exceeded 60 days; fixed-income securities, including mortgage backed and asset backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker/dealers. In cases where broker/dealer quotes are obtained, the Pricing Policies provide that the Adviser may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security; and OTC and other derivatives are valued on the basis of a quoted bid price or spread from a major broker/dealer in such security. Securities for which market quotations are not readily available are valued at fair value in accordance with the Pricing Policies. 2. Currency Translation Assets and liabilities denominated in foreign currencies and commitments under forward exchange currency contracts are translated into U.S. dollars at the mean of the quoted bid and asked prices of such currencies against the U.S. dollar. Purchases and sales of portfolio securities are translated into U.S. dollars at the rates of exchange prevailing when such securities were acquired or sold. Income and expenses are translated into U.S. dollars at rates of exchange prevailing when accrued. Net realized gain or loss on foreign currency transactions represents foreign exchange gains and losses from sales and maturities of foreign fixed income investments, foreign currency exchange contracts, holding of foreign currencies, currency gains or losses realized between the trade and settlement dates on foreign investment transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains and losses from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of net unrealized appreciation and depreciation of investments and foreign currency denominated assets and liabilities. _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 15 Notes to Financial Statements - ------------------------------------------------------------------------------- 3. Taxes It is the Fund's policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required. The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued and applied to net investment income, net realized gains and net unrealized appreciation/depreciation as such income and/or gains are earned. 4. Investment Income and Investment Transactions Dividend income is recorded on the ex-dividend date or as soon as the Fund is informed of the dividend. Interest income is accrued daily. Investment transactions are accounted for on the date securities are purchased or sold. Investment gains and losses are determined on the identified cost basis. The Fund accretes discounts on short-term securities as adjustments to interest income. 5. Income and Expenses All income earned and expenses incurred by the Fund are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in the Fund represented by the net assets of such class, except that the Fund's Class B and Class C shares bear higher distribution and transfer agent fees than Class A and Advisor Class shares. Advisor Class shares have no distribution fees. 6. Dividends and Distributions Dividends and distributions to shareholders, if any, are recorded on the ex-dividend date. Income dividends and capital gains distributions are determined in accordance with federal tax regulations and may differ from those determined in accordance with U.S. generally accepted accounting principles. To the extent these differences are permanent, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification. NOTE B Advisory Fee and Other Transactions with Affiliates Under the terms of an investment advisory agreement, the Fund pays the Adviser a fee at an annual rate of 1% of the Fund's average daily net assets. Such fee is accrued daily and paid monthly. The Adviser has agreed for the current fiscal year to waive its fee and bear certain expenses so that total expenses do not exceed on an annual basis to 2.50%, 3.20%, 3.20%, and 2.20% of average daily net assets, respectively, for the Class A, Class B, Class C and Advisor Class shares. For the year ended July 31, 2004, such reimbursement amounted to $62,082. _______________________________________________________________________________ 16 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Notes to Financial Statements - ------------------------------------------------------------------------------- Effective January 1, 2004, the Adviser began waiving a portion of its advisory fee so as to charge the Fund at the reduced annual rate of .75% of the first $2.5 billion, .65% of the next $2.5 billion and .60% in excess of $5 billion, of the average daily net assets of the Fund. Through July 31, 2004, such waiver amounted to $78,811. The waiver was made in contemplation of the final agreement with the Office of the New York Attorney General ("NYAG") described in "Legal Proceedings" below. For the year ended July 31, 2004, the Adviser voluntarily agreed to reimburse a portion of certain audit fees related to the investigations described under "Legal Proceedings" below in the amount of $1,125. Pursuant to the advisory agreement, the Fund may reimburse the Adviser for certain legal and accounting services provided to the Fund by the Adviser. For the year ended July 31, 2004, the Adviser voluntarily agreed to waive its fees for such services. Such waiver amounted to $109,500. The Fund compensates Alliance Global Investor Services, Inc. (AGIS), a wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for providing personnel and facilities to perform transfer agency services for the Fund. Such compensation amounted to $66,386 for the year ended July 31, 2004. During the period, AGIS voluntarily agreed to waive a portion of its fees for such services. Such waiver amounted to $3,370. For the year ended July 31, 2004, the Fund's expenses were reduced by $9 under an expense offset arrangement with AGIS. AllianceBernstein Investment Research and Management, Inc. (the "Distributor"), a wholly-owned subsidiary of the Adviser, serves as the distributor of the Fund's shares. The Distributor has advised the Fund that it has retained front-end sales charges of $26,091 from the sale of Class A shares and received $9,988, $34,435 and $42,726 in contingent deferred sales charges imposed upon redemptions by shareholders of Class A, Class B and Class C shares, respectively, for the year ended July 31, 2004. Brokerage commissions paid on investment transactions for the year ended July 31, 2004, amounted to $250,394, none of which was paid to Sanford C. Bernstein & Co. LLC, an affiliate of the Adviser. NOTE C Distribution Services Agreement The Fund has adopted a Distribution Services Agreement (the "Agreement") pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Agreement the Fund pays distribution and servicing fees to the Distributor at an annual rate of up to .30% of the Fund's average daily net assets attributable to Class A shares and 1% of the Fund's average daily net assets attributable to both Class B and Class C shares. There are no distribution and servicing fees on the _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 17 Notes to Financial Statements - ------------------------------------------------------------------------------- Advisor Class shares. The fees are accrued daily and paid monthly. The Agreement provides that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. The Distributor has advised the Fund that it has incurred expenses in excess of the distribution costs reimbursed by the Fund in the amounts of $2,192,795 and $778,196 for Class B and Class C shares, respectively; such costs may be recovered from the Fund in future periods so long as the Agreement is in effect. In accordance with the Agreement, there is no provision for recovery of unreimbursed distribution costs, incurred by the Distributor beyond the current fiscal year for Class A shares. The Agreement also provides that the Adviser may use its own resources to finance the distribution of the Fund's shares. NOTE D Investment Transactions Purchases and sales of investment securities (excluding short-term investments) for the year ended July 31, 2004, were as follows: Purchases Sales ============= ============= Investment securities (excluding U.S. government securities) $ 64,292,801 $ 36,044,814 U.S. government securities -0- -0- At July 31, 2004, the cost of investments for federal income tax purposes, gross unrealized appreciation and unrealized depreciation (excluding foreign currency transactions) are as follows: Cost $ 40,446,309 ============= Gross unrealized appreciation $ 5,181,242 Gross unrealized depreciation (2,970,066) ------------- Net unrealized appreciation $ 2,211,176 ============= Forward Exchange Currency Contracts The Fund may enter into forward exchange currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to hedge certain firm purchase and sales commitments denominated in foreign currencies and for investment purposes. A forward exchange currency contract is a commitment to purchase or sell a foreign currency on a future date at a negotiated forward rate. The gain or loss arising from the difference between the original contract and the closing of such contract would be included in net realized gains or losses on foreign currency transactions. Fluctuations in the value of open forward exchange currency contracts are recorded for financial reporting purposes as unrealized appreciation and depreciation by the Fund. The Fund's custodian will place and maintain cash not available for investment or other liquid assets in a separate account of the Fund having a value at least equal to the aggregate amount of the Fund's commitments under forward exchange currency contracts entered into with respect to position hedges. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and _______________________________________________________________________________ 18 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Notes to Financial Statements - ------------------------------------------------------------------------------- from unanticipated movements in the value of foreign currency relative to the U.S. dollar. The face or contract amount, in U.S. dollars reflects the total exposure the Fund has in that particular currency contract. NOTE E Capital Stock There are 12,000,000,000 shares of $.001 par value capital stock authorized, divided into four classes, designated Class A, Class B, Class C and Advisor Class. Each class consists of 3,000,000,000 authorized shares. Transactions in capital stock were as follows: Shares Amount --------------------------- ------------------------------ Year Ended Year Ended Year Ended Year Ended July 31, 2004 July 31, 2003 July 31, 2004 July 31, 2003 ------------ ------------ -------------- -------------- CLASS A Shares sold 3,383,026 1,067,796 $38,987,894 $ 7,841,000 - ------------------------------------------------------------------------------- Shares issued in reinvestment of dividends 3,929 2,677 44,053 18,418 - ------------------------------------------------------------------------------- Shares converted from Class B 24,581 11,194 281,975 77,423 - ------------------------------------------------------------------------------- Shares redeemed (2,212,592) (930,890) (25,727,641) (6,739,131) - ------------------------------------------------------------------------------- Net increase 1,198,944 150,777 $13,586,281 $ 1,197,710 =============================================================================== CLASS B Shares sold 1,694,629 2,528,499 $17,996,666 $17,414,309 - ------------------------------------------------------------------------------- Shares issued in reinvestment of dividends 984 1,747 10,662 11,653 - ------------------------------------------------------------------------------- Shares converted to Class A (25,516) (11,581) (281,975) (77,423) - ------------------------------------------------------------------------------- Shares redeemed (967,879) (2,422,584) (10,073,297) (16,700,679) - ------------------------------------------------------------------------------- Net increase 702,218 96,081 $ 7,652,056 $ 647,860 =============================================================================== CLASS C Shares sold 1,778,712 4,401,475 $19,037,472 $30,883,247 - ------------------------------------------------------------------------------- Shares issued in reinvestment of dividends 1,019 747 11,009 4,984 - ------------------------------------------------------------------------------- Shares redeemed (1,284,957) (4,009,743) (13,414,541) (28,032,481) - ------------------------------------------------------------------------------- Net increase 494,774 392,479 $ 5,633,940 $ 2,855,750 =============================================================================== ADVISOR CLASS Shares sold 247,363 76,366 $ 2,806,476 $ 581,179 - ------------------------------------------------------------------------------- Shares issued in reinvestment of dividends 217 79 2,469 549 - ------------------------------------------------------------------------------- Shares redeemed (155,880) (67,463) (1,747,669) (513,391) - ------------------------------------------------------------------------------- Net increase 91,700 8,982 $ 1,061,276 $ 68,337 =============================================================================== _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 19 Notes to Financial Statements - ------------------------------------------------------------------------------- NOTE F Risks Involved in Investing in the Fund Concentration of Risk--Investing in securities of foreign companies involves special risk which include the possibility of future political and economic developments which could adversely affect the value of such securities. Moreover, securities of many foreign companies and their markets may be less liquid and their prices more volatile than those of comparable United States companies. The Fund has invested approximately 72% of its net assets in Hong Kong equity securities. Political, social or economic changes in this market may have a greater impact on the value of the Fund's portfolio due to this concentration. In the ordinary course of business, the Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote. NOTE G Joint Credit Facility A number of open-end mutual funds managed by the Adviser, including the Fund, participate in a $500 million revolving credit facility (the "Facility") intended to provide short-term financing if necessary, subject to certain restrictions in connection with abnormal redemption activity. Commitment fees related to the Facility are paid by the participating funds and are included in miscellaneous expenses in the statement of operations. The Fund did not utilize the Facility during the year ended July 31, 2004. NOTE H Distributions to Shareholders The tax character of distributions paid during the fiscal years ended July 31, 2004 and July 31, 2003 were as follows: 2004 2003 ============= ============= Distributions paid from: Ordinary income $ 89,585 $ 45,471 ------------- ------------- Total taxable distributions 89,585 45,471 ------------- ------------- Total distributions paid $ 89,585 $ 45,471 ------------- ------------- _______________________________________________________________________________ 20 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Notes to Financial Statements - ------------------------------------------------------------------------------- As of July 31, 2004, the components of accumulated earnings/(deficit) on a tax basis were as follows: Accumulated capital and other losses $ (103,660)(a) Unrealized appreciation/(depreciation) 2,209,765(b) ------------- Total accumulated earnings/(deficit) $ 2,106,105 ============= (a) On July 31, 2004, the Fund had a net capital loss carryforward for federal income tax purposes of $103,660 which expires in the year 2011. To the extent future capital gains are offset by capital loss carryforwards, such gains will not be distributed. The Fund utilized $1,630,168 of capital loss carryforward during the year. (b) The differences between book-basis and tax-basis unrealized appreciation/(depreciation) are attributable primarily to the tax deferral of losses on wash sales. During the current fiscal year, permanent differences, primarily due to foreign currency losses, net investment loss, resulted in a net increase in accumulated net realized loss on investments and foreign currency transactions, decrease in accumulated net investment loss, and a corresponding decrease in additional paid-in capital. This reclassification had no effect on net assets. NOTE I Legal Proceedings As has been previously reported in the press, the staff of the U.S. Securities and Exchange Commission ("SEC") and the NYAG have been investigating practices in the mutual fund industry identified as "market timing" and "late trading" of mutual fund shares. Certain other regulatory authorities have also been conducting investigations into these practices within the industry and have requested that the Adviser provide information to them. The Adviser has been cooperating and will continue to cooperate with all of these authorities. On December 18, 2003, the Adviser confirmed that it had reached terms with the SEC and the NYAG for the resolution of regulatory claims relating to the practice of "market timing" mutual fund shares in some of the AllianceBernstein Mutual Funds. The agreement with the SEC is reflected in an Order of the Commission ("SEC Order"). The agreement with the NYAG is memorialized in an Assurance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the key provisions of these agreements are the following: (i) The Adviser agreed to establish a $250 million fund (the "Reimbursement Fund") to compensate mutual fund shareholders for the adverse effects of market timing attributable to market timing relationships described in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be paid, in order of priority, to fund investors based on (i) their aliquot share of losses suffered by the fund due to market timing, and (ii) a proportionate share of advisory fees paid by such fund during the period of such market timing; _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 21 Notes to Financial Statements - ------------------------------------------------------------------------------- (ii) The Adviser agreed to reduce the advisory fees it receives from some of the AllianceBernstein long-term, open-end retail funds until December 31, 2008; and (iii) The Adviser agreed to implement changes to its governance and compliance procedures. Additionally, the SEC Order and the NYAG Order contemplate that the Adviser's registered investment company clients, including the Fund, will introduce governance and compliance changes. In anticipation of final, definitive documentation of the NYAG Order and effective January 1, 2004, the Adviser began waiving a portion of its advisory fee. For more information on this waiver, please see "Advisory Fee and Other Transactions with Affiliates" above. A special committee of the Adviser's Board of Directors, comprised of the members of the Adviser's Audit Committee and the other independent member of the Adviser's Board, is continuing to direct and oversee an internal investigation and a comprehensive review of the facts and circumstances relevant to the SEC's and the NYAG's investigations. In addition, the Independent Directors of the Fund ("the Independent Directors") have initiated an investigation of the above-mentioned matters with the advice of an independent economic consultant and independent counsel. The Independent Directors have formed a special committee to supervise the investigation. On October 2, 2003, a putative class action complaint entitled Hindo et al. v. AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran (collectively, the "Alliance Capital defendants"); and certain other defendants not affiliated with the Adviser. The Hindo Complaint was filed in the United States District Court for the Southern District of New York by alleged shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint alleges that certain of the Alliance Capital defendants failed to disclose that they improperly allowed certain hedge funds and other unidentified parties to engage in late trading and market timing of AllianceBernstein Fund securities, violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek an unspecified amount of compensatory damages and rescission of their contracts with the Adviser, including recovery of all fees paid to the Adviser pursuant to such contracts. _______________________________________________________________________________ 22 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Notes to Financial Statements - ------------------------------------------------------------------------------- Since October 2, 2003, numerous additional lawsuits making factual allegations similar to those in the Hindo Complaint were filed against the Adviser and certain other defendants, some of which name the Fund as a defendant. All of these lawsuits seek an unspecified amount of damages. As a result of the matters discussed above, investors in the AllianceBernstein Mutual Funds may choose to redeem their investments. This may require the AllianceBernstein Mutual Funds to sell investments held by those funds to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the AllianceBernstein Mutual Funds. The Adviser and approximately twelve other investment management firms were publicly mentioned in connection with the settlement by the SEC of charges that Morgan Stanley violated federal securities laws relating to its receipt of compensation for selling specific mutual funds and the disclosure of such compensation. The SEC has indicated publicly that, among other things, it is considering enforcement action in connection with mutual funds' disclosure of such arrangements and in connection with the practice of considering mutual fund sales in the direction of brokerage commissions from fund portfolio transactions. The SEC has issued subpoenas to the Adviser in connection with this matter and the Adviser has provided documents and other information to the SEC and is cooperating fully with its investigation. On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v. Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against the Adviser, Alliance Capital Management Holding L.P., Alliance Capital Management Corporation, AXA Financial, Inc., AllianceBernstein Investment Research & Management, Inc., certain current and former directors of the AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin Complaint names certain of the AllianceBernstein Mutual Funds, including the Fund, as nominal defendants. The Aucoin Complaint was filed in the United States District Court for the Southern District of New York by an alleged shareholder of the AllianceBernstein Growth & Income Fund. The Aucoin Complaint alleges, among other things, (i) that certain of the defendants improperly authorized the payment of excessive commissions and other fees from AllianceBernstein Fund assets to broker-dealers in exchange for preferential marketing services, (ii) that certain of the defendants misrepresented and omitted from registration statements and other reports material facts concerning such payments, and (iii) that certain defendants caused such conduct as control persons of other defendants. The Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and 48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act, breach of common law fiduciary duties, and aiding and abetting breaches of common law fiduciary duties. Plaintiffs seek an unspecified amount of compensatory damages and punitive damages, rescission of their contracts with the Adviser, including recovery of all fees paid to the Adviser pursuant to such _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 23 Notes to Financial Statements - ------------------------------------------------------------------------------- contracts, an accounting of all AllianceBernstein Fund-related fees, commissions and soft dollar payments, and restitution of all unlawfully or discriminatorily obtained fees and expenses. Since June 22, 2004, numerous additional lawsuits making factual allegations substantially similar to those in the Aucoin Complaint were filed against the Adviser and certain other defendants, and others may be filed. It is possible that these matters and/or other developments resulting from these matters could result in increased redemptions of the Fund's shares or other adverse consequences to the Fund. However, the Adviser believes that these matters are not likely to have a material adverse effect on the Fund or its ability to perform advisory services relating to the Fund. _______________________________________________________________________________ 24 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Financial Highlights - ------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A --------------------------------------------------------------- Year Ended July 31, --------------------------------------------------------------- 2004 2003 2002 2001 2000 ----------- ----------- ----------- ----------- ----------- Net asset value, beginning of period $8.82 $7.55 $8.45 $10.34 $8.20 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(a)(b) (.04)(c) .04 .09 (.01) (.04) Net realized and unrealized gain (loss) on investment and foreign currency transactions 2.01 1.32 (.99) (1.88) 2.18 Net increase (decrease) in net asset value from operations 1.97 1.36 (.90) (1.89) 2.14 LESS: DIVIDENDS Dividends from net investment income (.04) (.09) -0- -0- -0- Net asset value, end of period $10.75 $8.82 $7.55 $8.45 $10.34 TOTAL RETURN Total investment return based on net asset value(d) 22.30% 18.35% (10.65)% (18.28)% 26.10% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) $17,719 $3,958 $2,253 $2,039 $2,471 Ratio to average net assets of: Expenses, net of waivers/ reimbursements 2.38% 2.50% 2.50% 2.51%(e) 2.52%(e) Expenses, before waivers/ reimbursements 2.94% 9.24% 10.82% 9.50%(e) 9.92%(e) Net investment income (loss)(b) (.37)%(c) .58% 1.18% (.09)% (.42)% Portfolio turnover rate 89% 102% 63% 64% 158%
See footnote summary on page 29. _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 25 Financial Highlights - ------------------------------------------------------------------------------- Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B --------------------------------------------------------------- Year Ended July 31, --------------------------------------------------------------- 2004 2003 2002 2001 2000 ----------- ----------- ----------- ----------- ----------- Net asset value, beginning of period $8.52 $7.30 $8.21 $10.13 $8.12 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(a)(b) (.12)(c) (.01) .03 (.07) (.11) Net realized and unrealized gain (loss) on investment and foreign currency transactions 1.95 1.27 (.94) (1.85) 2.12 Net increase (decrease) in net asset value from operations 1.83 1.26 (.91) (1.92) 2.01 LESS: DIVIDENDS Dividends from net investment income (.02) (.04) -0- -0- -0- Net asset value, end of period $10.33 $8.52 $7.30 $8.21 $10.13 TOTAL RETURN Total investment return based on net asset value(d) 21.41% 17.32% (11.08)% (18.95)% 24.75% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) $12,872 $4,632 $3,266 $3,234 $4,047 Ratio to average net assets of: Expenses, net of waivers/ reimbursements 3.18% 3.20% 3.20% 3.21%(e) 3.22%(e) Expenses, before waivers/ reimbursements 3.79% 9.98% 11.56% 10.28%(e) 10.72%(e) Net investment income (loss)(b) (1.11)%(c) (.11)% .41% (.81)% (1.13)% Portfolio turnover rate 89% 102% 63% 64% 158%
See footnote summary on page 29. _______________________________________________________________________________ 26 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Financial Highlights - ------------------------------------------------------------------------------- Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C --------------------------------------------------------------- Year Ended July 31, --------------------------------------------------------------- 2004 2003 2002 2001 2000 ----------- ----------- ----------- ----------- ----------- Net asset value, beginning of period $8.50 $7.30 $8.21 $10.13 $8.11 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(a)(b) (.12)(c) (.01) .04 (.08) (.13) Net realized and unrealized gain (loss) on investment and foreign currency transactions 1.94 1.25 (.95) (1.84) 2.15 Net increase (decrease) in net asset value from operations 1.82 1.24 (.91) (1.92) 2.02 LESS: DIVIDENDS Dividends from net investment income (.02) (.04) -0- -0- -0- Net asset value, end of period $10.30 $8.50 $7.30 $8.21 $10.13 TOTAL RETURN Total investment return based on net asset value(d) 21.34% 17.05% (11.08)% (18.95)% 24.91% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) $10,978 $4,856 $1,302 $877 $1,372 Ratio to average net assets of: Expenses, net of waivers/ reimbursements 3.15% 3.20% 3.20% 3.21%(e) 3.22%(e) Expenses, before waivers/ reimbursements 3.75% 10.19% 11.28% 10.13%(e) 10.01%(e) Net investment income (loss)(b) (1.07)%(c) (.15)% .50% (.84)% (1.31)% Portfolio turnover rate 89% 102% 63% 64% 158%
See footnote summary on page 29. _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 27 Financial Highlights - ------------------------------------------------------------------------------- Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Advisor Class --------------------------------------------------------------- Year Ended July 31, --------------------------------------------------------------- 2004 2003 2002 2001 2000 ----------- ----------- ----------- ----------- ----------- Net asset value, beginning of period $8.94 $7.66 $8.53 $10.41 $8.24 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(a)(b) (.02)(c) .08 .10 .06 (.02) Net realized and unrealized gain (loss) on investment and foreign currency transactions 2.05 1.31 (.97) (1.94) 2.19 Net increase (decrease) in net asset value from operations 2.03 1.39 (.87) (1.88) 2.17 LESS: DIVIDENDS Dividends from net investment income (.04) (.11) -0- -0- -0- Net asset value, end of period $10.93 $8.94 $7.66 $8.53 $10.41 TOTAL RETURN Total investment return based on net asset value(d) 22.72% 18.55% (10.20)% (18.06)% 26.34% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) $1,379 $309 $196 $386 $273 Ratio to average net assets of: Expenses, net of waivers/ reimbursements 2.14% 2.20% 2.20% 2.21%(e) 2.22%(e) Expenses, before waivers/ reimbursements 2.71% 8.69% 10.57% 9.35%(e) 9.61%(e) Net investment income (loss)(b) (.13)%(c) 1.14% 1.28% .71% (.15)% Portfolio turnover rate 89% 102% 63% 64% 158%
See footnote summary on page 29. _______________________________________________________________________________ 28 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Financial Highlights - ------------------------------------------------------------------------------- (a) Based on average shares outstanding. (b) Net of expenses waived/reimbursed by the Adviser. (c) Net of expenses waived by the Transfer Agent. (d) Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Initial sales charges or contingent deferred sales charges are not reflected in the calculation of total investment return. Total return does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Total investment return calculated for a period of less than one year is not annualized. (e) Ratios reflect expenses grossed up for expense offset arrangement with the Transfer Agent. For the periods shown below, the net expense ratios were as follows: Year Ended July 31, ----------------------------- 2001 2000 ----------------------------- Class A 2.50% 2.50% Class B 3.20% 3.20% Class C 3.20% 3.20% Advisor Class 2.20% 2.20% _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 29 Report of Independent Registered Public Accounting Firm - ------------------------------------------------------------------------------- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of AllianceBernstein Greater China '97 Fund, Inc. We have audited the accompanying statement of assets and liabilities of AllianceBernstein Greater China '97 Fund, Inc., including the portfolio of investments, as of July 31, 2004, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of July 31, 2004, by correspondence with the custodian and others. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AllianceBernstein Greater China '97 Fund, Inc. at July 31, 2004, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles. /s/ Ernst & Young LLP New York, New York September 10, 2004 TAX INFORMATION (unaudited) For the fiscal year ended July 31, 2004, certain dividends paid by the Fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Fund designates a maximum amount of $911,720 as qualified dividend income, which is taxed at a maximum rate of 15%.The information and distributions reported herein may differ from the information and distributions taxable to the shareholders for the calendar year ending December 31, 2004.Complete information will be computed and reported in conjunction with your 2004 Form 1099-DIV. _______________________________________________________________________________ 30 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Board of Directors - ------------------------------------------------------------------------------- BOARD OF DIRECTORS William H. Foulk, Jr.(1), Chairman David H. Dievler(1) Clifford L. Michel(1) Tak-Lung Tsim OFFICERS Marc O. Mayer, President Matthew W. S. Lee(2), Senior Vice President Mark R. Manley, Secretary Mark D. Gersten, Treasurer and Chief Financial Officer Vincent S. Noto, Controller Principal Underwriter AllianceBernstein Investment Research and Management, Inc. 1345 Avenue of the Americas New York, NY 10105 Custodian Brown Brothers Harriman & Co. 40 Water Street Boston, MA 02109 Legal Counsel Seward & Kissel LLP One Battery Park Plaza New York, NY 10004 Transfer Agent Alliance Global Investor Services, Inc. P.O. Box 786003 San Antonio, TX 78278-6003 Toll-Free (800) 221-5672 Independent Registered Public Accounting Firm Ernst & Young LLP 5 Times Square New York, NY 10036 (1) Member of the Audit Committee. (2) Mr. Lee is the person primarily responsible for the day-to-day management of the Fund's investment portfolio. _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 31 Management of the Fund - ------------------------------------------------------------------------------- MANAGEMENT OF THE FUND Board of Directors Information The business and affairs of the Fund are managed under the direction of the Board of Directors. Certain information concerning the Fund's Directors is set forth below.
PORTFOLIOS IN FUND OTHER NAME, AGE OF DIRECTOR, PRINCIPAL COMPLEX DIRECTORSHIPS ADDRESS OCCUPATION(S) OVERSEEN BY HELD BY (YEARS OF SERVICE*) DURING PAST 5 YEARS DIRECTOR DIRECTOR - ----------------------------------------------------------------------------------------------------------------- INTERESTED DIRECTORS Tak-Lung Tsim,**, 58 A Principal of T.L. Tsim & 1 Chairman of T.L. Tsim & Associates Associates Limited, a New-Alliance Limited consulting company which he Asset Suite 1001 established in August 1994. Management Century Square Chairman of New-Alliance (Asia) Limited. 1 D'Aguilar St. Asset Management (Asia) Director of Central, Hong Kong (6) Limited. Member of Li Po Playmates Chun United World College. Holdings Director of Playmates Holdings Limited. Far Limited. Far Eastern Polychem Eastern Industries and China Medical Polychem Science Limited. Industries and China Medical Science Limited. DISINTERESTED DIRECTORS William H. Foulk, Jr., #+, 72 Investment Adviser and an 113 None 2 Sound View Drive Independent Consultant. He Suite 100 was formerly Senior Manager Greenwich, CT 06830 of Barrett Associates, Inc., a (7) registered investment adviser, (Chairman of the Board) with which he had been associated since prior to 1999. He was formerly Deputy Comptroller and Chief Investment Officer of the State of New York and, prior thereto, Chief Investment Officer of the New York Bank for Savings. David H. Dievler,#+, 74 Independent consultant. Until 98 None P.O. Box 167 December 1994, he was Senior Spring Lake, NJ 07762 Vice President of ACMC responsible (7) for mutual fund administration. Prior to joining ACMC in 1984, he was Chief Financial Officer of Eberstadt Asset Management since 1968. Prior to that, he was a Senior Manager at Price Waterhouse & Co. Member of the American Institute of Certified Public Accountants since 1953.
_______________________________________________________________________________ 32 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND Management of the Fund - -------------------------------------------------------------------------------
PORTFOLIOS IN FUND OTHER NAME, AGE OF DIRECTOR, PRINCIPAL COMPLEX DIRECTORSHIPS ADDRESS OCCUPATION(S) OVERSEEN BY HELD BY (YEARS OF SERVICE*) DURING PAST 5 YEARS DIRECTOR DIRECTOR - ----------------------------------------------------------------------------------------------------------------- DISINTERESTED DIRECTORS (continued) Clifford L. Michel, #+, 65 Senior Counsel to the law firm 96 Placer Dome, 15 St. Bernard's Road of Cahill Gordon & Reindel Inc. Gladstone, NJ 07934 since February 2001 and a (2) partner of that firm for more than 25 years prior thereto. He is President and Chief Executive Officer of Wenonah Development Company (investments) and a Director of the Placer Dome Inc. (mining).
* There is no stated term of office for the Fund's Directors. ** Mr. Tsim is an "interested director", as defined in the 1940 Act, due to his position as Consultant of T.L. Tsim & Associates Limited. # Member of the Audit Committee. + Member of the Nominating Committee. _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 33 Management of the Fund - ------------------------------------------------------------------------------- Officer Information Certain information concerning the Fund's Officers is listed below.
NAME, POSITION(S) PRINCIPAL OCCUPATION ADDRESS,* AND AGE HELD WITH FUND DURING PAST 5 YEARS** - -------------------------------------------------------------------------------------------------------------- Marc O. Mayer, **,46 President Executive Vice President of ACMC since 2001; prior thereto, Chief Executive Officer of Sanford C. Bernstein & Co., LLC ("SCB & Co.") and its predecessor since prior to 1999. Matthew W.S. Lee, 41 Senior Vice President Vice President of ACMC**, with which and Chief Investment he has been associated since prior to Officer 1999. Mark R.Manley, 41 Secretary Senior Vice President and Chief Compliance Officer of ACMC, with which he has been associated since prior to 1999. Mark D. Gersten, 53 Treasurer and Chief Senior Vice President of Alliance Global Financial Officer Investor Services, Inc. ("AGIS")** and Vice President of AllianceBernstein Investment Research and Management, Inc. ("ABIRM")**, with which he has been associated since prior to 1999. Vincent S. Noto, 39 Controller Vice President of AGIS**, with which he has been associated since prior to 1999.
* The address for each of the Fund's Officers is 1345 Avenue of the Americas, New York, NY 10105. ** ACMC, ABIRM and AGIS are affiliates of the Fund. The Fund's Statement of Additional Information ("SAI") has additional information about the Fund's Directors and Officers and is available without charge upon request. Contact your financial representative or Alliance Capital at 1-800-227-4618 for a free prospectus or SAI. _______________________________________________________________________________ 34 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND AllianceBernstein Family of Funds - ------------------------------------------------------------------------------- ALLIANCEBERNSTEIN FAMILY OF FUNDS - -------------------------------------------- Wealth Strategies Funds - -------------------------------------------- Balanced Wealth Strategy Wealth Appreciation Strategy Wealth Preservation Strategy Tax-Managed Balanced Wealth Strategy* Tax-Managed Wealth Appreciation Strategy Tax-Managed Wealth Preservation Strategy** - -------------------------------------------- Blended Style Funds - -------------------------------------------- U.S. Large Cap Portfolio International Portfolio Tax-Managed International Portfolio - -------------------------------------------- Growth Funds - -------------------------------------------- Domestic Growth Fund Health Care Fund Mid-Cap Growth Fund Premier Growth Fund Small Cap Growth Fund Technology Fund Global & International All-Asia Investment Fund Global Research Growth Fund Global Small Cap Fund Greater China '97 Fund International Premier Growth Fund New Europe Fund Worldwide Privatization Fund Select Investor Series Biotechnology Portfolio Premier Portfolio Technology Portfolio - -------------------------------------------- Value Funds - -------------------------------------------- Domestic Balanced Shares Disciplined Value Fund Growth & Income Fund Real Estate Investment Fund Small Cap Value Fund Utility Income Fund Value Fund Global & International Global Value Fund International Value Fund - -------------------------------------------- Taxable Bond Funds - -------------------------------------------- Americas Government Income Trust Corporate Bond Portfolio Emerging Market Debt Fund Global Strategic Income Trust High Yield Fund Multi-Market Strategy Trust Quality Bond Portfolio Short Duration Portfolio U.S. Government Portfolio - -------------------------------------------- Municipal Bond Funds - -------------------------------------------- National Insured National Arizona California Insured California Florida Massachusetts Michigan Minnesota New Jersey New York Ohio Pennsylvania Virginia - -------------------------------------------- Intermediate Municipal Bond Funds - -------------------------------------------- Intermediate California Intermediate Diversified Intermediate New York - -------------------------------------------- Closed-End Funds - -------------------------------------------- All-Market Advantage Fund ACM Income Fund ACM Government Opportunity Fund ACM Managed Dollar Income Fund ACM Managed Income Fund ACM Municipal Securities Income Fund California Municipal Income Fund National Municipal Income Fund New York Municipal Income Fund The Spain Fund World Dollar Government Fund World Dollar Government Fund II We also offer Exchange Reserves,+ which serves as the money market fund exchange vehicle for the AllianceBernstein mutual funds. For more complete information on any AllianceBernstein mutual fund, including investment objectives and policies, sales charges, expenses, risks and other matters of importance to prospective investors, visit our web site at www.alliancebernstein.com or call us at (800) 227-4618 for a current prospectus. Please read the prospectus carefully before you invest or send money. * Formerly Growth Investors Fund. ** Formerly Conservative Investors Fund. + An investment in the Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. _______________________________________________________________________________ ALLIANCEBERNSTEIN GREATER CHINA '97 FUND o 35 NOTES _______________________________________________________________________________ 36 o ALLIANCEBERNSTEIN GREATER CHINA '97 FUND ALLIANCEBERNSTEIN GREATER CHINA '97 FUND 1345 Avenue of the Americas New York, NY 10105 (800) 221-5672 [LOGO] AllianceBernstein (SM) Investment Research and Management (SM) This service mark used under license from the owner, Alliance Capital Management L.P. GCFAR0704 ITEM 2. CODE OF ETHICS. (a) The registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer and principal accounting officer. A copy of the registrant's code of ethics is filed herewith as Exhibit 11(a)(1). (b) During the period covered by this report, no material amendments were made to the provisions of the code of ethics adopted in 2(a) above. (c) During the period covered by this report, no implicit or explicit waivers to the provisions of the code of ethics adopted in 2(a) above were granted. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's Board of Directors has determined that independent directors David H. Dievler and William H. Foulk, Jr. qualify as audit committee financial experts. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. The following table sets forth the aggregate fees billed by the independent auditor, Ernst & Young LLP, for the Fund's last two fiscal years for professional services rendered for: (i) the audit of the Fund's annual financial statements included in the Fund's annual report to stockholders; (ii) assurance and related services that are reasonably related to the performance of the audit of the Fund's financial statements and are not reported under (i), which include multi-class distribution testing, advice and education on accounting and auditing issues, and consent letters; (iii) tax compliance, tax advice and tax return preparation; and (iv) aggregate non-audit services provided to the Fund, the Fund's Adviser and entities that control, are controlled by or under common control with the Adviser that provide ongoing services to the Fund ("Service Affiliates"), which include conducting an annual internal control report pursuant to Statement on Auditing Standards No. 70. No other services were provided to the Fund during this period. All Fees for Non-Audit Services Provided to the Portfolio, the Adviser Audit-Related and Service Audit Fees Fees Tax Fees Affiliates - ------------------------------------------------------------------------------- 2003: $25,125 $9,933 $11,100 $708,448 2004: $24,000 $7,721 $13,479 $858,801 Beginning with audit and non-audit service contracts entered into on or after May 6, 2003, the Fund's Audit Committee policies and procedures require the pre-approval of all audit and non-audit services provided to the Fund by the Fund's independent auditors. The Fund's Audit Committee policies and procedures also require pre-approval of all audit and non-audit services provided to the Adviser and Service Affiliates to the extent that these services are directly related to the operations or financial reporting of a Fund. Accordingly, all of the amounts in the table for Audit Fees, Audit-Related Fees and Tax Fees for the entire period ended 2003 and 2004 are for services pre-approved by the Fund's Audit Committee. The amounts of the Fees for Non-Audit Services provided to the Fund, the Adviser and Service Affiliates in the table for the Fund, that were subject to pre-approval by the Audit Committee for the entire period ended 2003 and 2004 were as follows: Non-Audit Services Pre-Approved by the Audit Committee --------------------------------------- Audit Related Tax Fees Fees Total -------- -------- ---------- 2003 $293,833 $11,100 $304,933 2004 $254,466 $13,479 $267,945 The Audit Committee of the Fund has considered whether the provision of any non-audit services not pre-approved by the Audit Committee provided by the Fund's independent auditor to the Adviser and Service Affiliates is compatible with maintaining the auditor's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable to the registrant. ITEM 6. SCHEDULE OF INVESTMENTS. Please see Schedule of Investments contained in the Report to Shareholders included under Item 1 of this Form N-CSR. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to the registrant. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable to the registrant. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which shareholders may recommend nominees to the Fund's Board of Directors since the Fund last provided disclosure in response to this item. ITEM 10. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended) are effective at the reasonable assurance level based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document. (b) There were no significant changes in the registrant's internal controls that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. ITEM 11. EXHIBITS. The following exhibits are attached to this Form N-CSR: EXHIBIT NO. DESCRIPTION OF EXHIBIT ----------- ----------------------- 11 (a) (1) Code of ethics that is subject to the disclosure of Item 2 hereof 11 (b) (1) Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 11 (b) (2) Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 11 (c) Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant): AllianceBernstein Greater China `97 Fund, Inc. By: /s/ Marc O. Mayer --------------------- Marc O. Mayer President Date: September 29, 2004 --------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Marc O. Mayer --------------------- Marc O. Mayer President Date: September 29, 2004 --------------------- By: /s/ Mark D. Gersten --------------------- Mark D. Gersten Treasurer and Chief Financial Officer Date: September 29, 2004 --------------------- EX-99.CODE ETH 2 edg10286-ethics.txt Exhibit 11(a)(1) CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS I. Covered Officers/Purpose of the Code The AllianceBernstein Mutual Fund Complex's code of ethics (this "Code") for the investment companies within the complex (collectively, the "Funds" and each, a "Company") applies to each Company's Principal Executive Officer, Principal Financial and Accounting Officer and Controller (the "Covered Officers," each of whom is set forth in Exhibit A) for the purpose of promoting: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Company; o compliance with applicable laws and governmental rules and regulations; o the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and o accountability for adherence to the Code. Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. II. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest Overview. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his service to, the Company. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Company. For the purposes of this Code, members of the Covered Officer's family include his or her spouse, children, stepchildren, financial dependents, parents and stepparents. Certain conflicts of interest arise out of the relationships between Covered Officers and the Company and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Company because of their status as "affiliated persons" of the Company. The Company's and the investment adviser's compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Company and the investment adviser of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Company or for the adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the adviser and the Company. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Company and the adviser and is consistent with the performance by the Covered Officers of their duties as officers of the Company. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Company's Board of Directors or Trustees (the "Directors") that the Covered Officers may also be officers or employees of one or more of the other Funds or of other investment companies covered by this or other codes. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Company. Each Covered Officer must: o not use his personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Company whereby the Covered Officer would benefit personally to the detriment of the Company; o not cause the Company to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Company; o not use material non-public knowledge of portfolio transactions made or contemplated for the Company to trade personally or cause others to trade personally in contemplation of the market effect of such transactions; There are some conflict of interest situations, whether involving a Covered Officer directly or a member of his family, that should always be discussed with the General Counsel of Alliance Capital Management L.P.(the "General Counsel"), if material. Examples of these include: o service as a director on the board of directors or trustees of any public or private company (other than a not-for-profit organization); o the receipt of any non-nominal gifts; o the receipt of any entertainment from any company with which the Company has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; o any ownership interest in, or any consulting or employment relationship with, any of the Company's service providers, other than its investment adviser, principal underwriter, administrator or any affiliated person thereof; o a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Company for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership. III. Disclosure and Compliance o Each Covered Officer should familiarize himself with the disclosure requirements and disclosure controls and procedures generally applicable to the Company; o each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Company to others, whether within or outside the Company, including to the Company's directors and auditors, and to governmental regulators and self-regulatory organizations; o each Covered Officer should, to the extent appropriate within his area of responsibility, consult with other officers and employees of the Funds and the adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds; and o it is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. IV. Reporting and Accountability Each Covered Officer must: o upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the General Counsel that he has received, read, and understands the Code; o annually thereafter affirm to the General Counsel that he has complied with the requirements of the Code; o complete at least annually a questionnaire relating to affiliations or other relationships that may give rise to conflicts of interest; o not retaliate against any other Covered Officer or any employee of the Company or their affiliated persons for reports of potential violations that are made in good faith; and o notify the General Counsel promptly if he knows of any violation of this Code. Failure to do so is itself a violation of this Code. The General Counsel is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. However, waivers sought by a Covered Officer will be considered by the Company's Audit Committee (the "Committee"). The Company will follow these procedures in investigating and enforcing this Code: o the General Counsel will take all appropriate action to investigate any potential violations reported to him; o if, after such investigation, the General Counsel believes that no material violation has occurred, the General Counsel is not required to take any further action; o any matter that the General Counsel believes is a material violation will be reported to the Committee; o if the Committee concurs that a material violation has occurred, it will inform and make a recommendation to the Directors, who will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer; o the Committee will be responsible for granting waivers, as appropriate; and o any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. V. Other Policies and Procedures This Code shall be the sole code of ethics adopted by the Company for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Company, the Company's adviser, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, it is understood that this Code is in all respects separate and apart from, and operates independently of, any such policies and procedures. In particular, the Company's and its investment adviser's and principal underwriter's codes of ethics under Rule 17j-l under the Investment Company Act are separate requirements applying to the Covered Officers and others, and are not part of this Code. VI. Amendments Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Directors, including a majority of independent directors. VII. Confidentiality All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Directors, the investment adviser, their counsel, counsel to the Company and, if deemed appropriate by the Directors of the Company, to the Directors of the other Funds. VIII. Internal Use The Code is intended solely for internal use by the Funds and does not constitute an admission, by or on behalf of any Company, as to any fact, circumstance, or legal conclusion. Date: July 22, 2003, as amended March 17, 2004 Exhibit A Persons Covered by this Code of Ethics Marc O. Mayer, Principal Executive Officer Mark Gersten, Principal Financial and Accounting Officer Vince Noto, Controller EX-99.CERT 3 edg10286-ex11b_302.txt Exhibit 11(b)(1) CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER I, Marc O. Mayer, certify that: 1. I have reviewed this report on Form N-CSR (the "Report") of AllianceBernstein Greater China '97 Fund, Inc. (the "Fund"); 2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report; 3. Based on my knowledge, the financial statements and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Fund as of, and for, the periods presented in this Report; 4. The Fund's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) for the Fund and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Fund, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; b) evaluated the effectiveness of the Fund's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this Report based on such evaluation; and c) disclosed in this Report any change in the Fund's internal control over financial reporting that occurred during the Fund's most recent fiscal half-year [or second fiscal half-year in the case of an annual report] that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial reporting; and 5. The Fund's other certifying officer and I have disclosed to the Fund's auditors and the audit committee of the Fund's board of directors: a) all significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Fund's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Fund's internal controls. Date: September 29, 2004 /s/Marc O. Mayer --------------------- Marc O. Mayer President Exhibit 11(b)(2) CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER I, Mark D. Gersten, certify that: 1. I have reviewed this report on Form N-CSR (the "Report") of AllianceBernstein Greater China `97 Fund, Inc. (the "Fund"); 2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report; 3. Based on my knowledge, the financial statements and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Fund as of, and for, the periods presented in this Report; 4. The Fund's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) for the Fund and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Fund, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; b) evaluated the effectiveness of the Fund's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this Report based on such evaluation; and c) disclosed in this Report any change in the Fund's internal control over financial reporting that occurred during the Fund's most recent fiscal half-year [or second fiscal half-year in the case of an annual report] that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial reporting; and 5. The Fund's other certifying officer and I have disclosed to the Fund's auditors and the audit committee of the Fund's board of directors: a) all significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Fund's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Fund's internal controls. Date: September 29, 2004 /s/ Mark D. Gersten --------------------- Mark D. Gersten Treasurer and Chief Financial Officer EX-99.906 CERT 4 edg10286-ex11c_906.txt Exhibit 11(c) CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT Pursuant to 18 U.S.C. 1350, each of the undersigned, being the Principal Executive Officer and Principal Financial Officer of AllianceBernstein Greater China '97 Fund, Inc. (the "Registrant"), hereby certifies that the Registrant's report on Form N-CSR for the period ended July 31, 2004 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: September 29, 2004 By: /s/ Marc O. Mayer --------------------- Marc O. Mayer President By: /s/ Mark D. Gersten --------------------- Mark D. Gersten Treasurer and Chief Financial Officer This certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Report or as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----